New car title tax starts Friday, phases out birthday tax

5:42 PM, Mar 1, 2013   |    comments
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Clerks at the DeKalb County Vehicle Registration Office prepare for the state's new title tax.

ATLANTA -- The DeKalb County Vehicle Registration Office is preparing for long lines and confusion when Georgia's new title ad valorem tax goes into effect on Friday.

"There's a lot of unknowns to it," said Brent Bennett, DeKalb's Director of Vehicle Registration, told 11Alive's Jennifer Leslie.

RELATED | Title Ad Valorem Tax Calculator

Clerks have been trained for the changes, but drivers have a lot of questions about whether it will save them money or cost more.

"I'm not sure," said driver Clarence Kittrell, who showed up on Thursday to register his vehicle. "I'm trying to figure out what is the big thing with all these new taxes and stuff."

RELATED | Title Ad Valorem Tax Overview

The title tax will phase out the birthday tax and replace the sales tax on any cars bought on or after Mar. 1.

The title tax starts at 6.5 percent of the vehicle's value. It will go up to 6.75 percent in 2014 and 7 percent in 2015.

"It's really unclear who's going to have to pay it and who's not," said driver Wrenn McClintic Doyle, who showed up on Thursday to avoid the tax on a title transfer. 

RELATED | Title Tax Questions & Answers

Drivers won't pay the title tax until they buy their next car.

In the meantime, they'll stay in the old system and continue to pay the birthday tax.

But anyone who bought a car between January of 2012 through February of this year can "opt in" to the new tax system. In many cases, it will save them money.

"If you purchased from a dealer, and you already paid sales tax, please opt in," said Bennett. "It makes all the practical sense to opt in."

MORE | Additional info and find your tax office

To "opt in," drivers will need to to bring their bill of sale and driver's license to their county vehicle registration office. They'll also need to fill out an affidavit.

They have until the end of the year to opt in. If they wait until after their birthday, they'll have to pay this year's birthday tax.

The new tax applies to anyone who buys, leases or trades a car.  

It covers new and used cars, whether they're sold by a dealer or private seller.

Here's one more big change: anyone who moves into Georgia from out of state will have to pay the title tax on any car they register here, and that could really add up.